Whistleblower Best Practices

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Wrongful Termination Claims May Invoke Whistleblower Protections in COVID-19

May 2020 The wave of coronavirus related litigation has already begun and will no doubt continue many years into the future, especially considering the case backlog that the pandemic has exacerbated.  As described in recent articles, areas of litigation include (but are by no means limited to) Price gouging Failure to provide good faith insurance [...]

Case Demonstrates the Limits of Whistleblower Protection

December 2014 The efforts to encourage and protect whistleblowers have been wide-reaching. However there are differences between the rewards and the protections based on the agency and laws involved. A recent case entitled Gary Vander Boegh v. EnergySolutions, Inc. demonstrated that not all protections are equal. The U.S. Department of Energy (“DOE”) hired Mr. Vander [...]

Whistleblower Program to Pay $30 Million for a Late Report from Overseas

October 2014 The Securities and Exchange Commission (“SEC”) has announced that it will award over $30 million in its latest high profile payout to a whistleblower who provided key original information that led to a successful SEC enforcement action. The award is getting a lot of attention for a number of reasons. This $30 million [...]

Whistleblower Protection Does Not Require Fraud On Shareholders

June 2013 A recent decision has clarified the reach of the protections offered to whistleblowers under Section 806 of the Sarbanes-Oxley Act of 2002 (“SOX”).  In the matter of Lockheed Martin Corporation v. Administrative Review Board, United States Department of Labor, it has been determined that SOX whistleblower protection extends beyond employee reporting of frauds [...]

IRS Whistleblower Program Provides Opportunities For Some, Pitfalls For Others

February 2013 The IRS has had a whistleblower program for decades, but it was not widely used and not much was paid to whistleblowers. However, the efforts to improve the program are bearing fruit.  The current program is outlined on www.irs.gov, where information is available regarding the purpose of the program, how to make a [...]

SEC Issues Final Rules On Their Whistleblower & Reward Program Under Dodd-Frank

June 2011 The Dodd-Frank Act, which was signed by President Obama on July 21, 2010, includes (in Section 922) a whistleblower program sponsored by the Securities and Exchange Commission (SEC). This law (i) makes significant changes in the existing whistleblower provisions of the Sarbanes-Oxley Act of 2002, and (ii) authorizes the SEC to pay between [...]

Employers Should Implement Whistleblower Reporting Changes Because Of The Dodd-Frank Act

November 2010 The Dodd-Frank Act, which was signed by President Obama on July 21, 2010, includes (in Section 922) a whistleblower program sponsored by the Securities and Exchange Commission (SEC). This law (i) makes significant changes in the existing whistleblower provisions of the Sarbanes-Oxley Act of 2002, and (ii) authorizes the SEC to pay between [...]

Nonprofit Organizations Need A Whistleblower Reporting Mechanism

February 2008 The IRS Form 990 calls for significantly expanded corporate governance disclosures. A charity’s Form 990 is publicly available, including most importantly to potential donors and regulators outside of the IRS. For the 2018 tax year (returns filed in 2019), most tax-exempt organizations with gross receipts over $200,000 or total assets over $500,000 will [...]

High Personal Cost Risk When Whistleblower Anonymity Is Not Maintained

February 2007 A February 2007 study by three professors looks at 230 of the U.S.’s largest public company frauds disclosed between 1996 and 2004. The study, entitled “Who Blows the Whistle on Corporate Fraud?” addresses how each fraud was discovered. Consistent with every other study on the subject, employee whistleblowers are the largest discovery mechanism. [...]

Best Practices In Whistleblower Systems

November 2012 A whistleblower hotline is probably the easiest and least expensive means available to improve corporate governance.  Waste, fraud, and the abuse of authority can all be combated by having an independent reporting mechanism that uses employees to report malfeasance. Public companies are required by Section 301(4) of the Sarbanes Oxley Act to have [...]

Regulators Find Whistleblower Hotlines To Be Effective…You (Or Your Clients) Should Be Talking To These Employees First

August 2004 Sarbanes-Oxley Act (SOX) Section 301(4) requires all public companies to establish a means to collect, retain, and resolve claims regarding accounting, internal accounting controls and auditing matters.  The system must allow for such concerns to be submitted anonymously.  SOX provides significant protections to whistleblowers, and severe penalties to those that retaliate against them. [...]

Fraud Survey Highlights The Value Of Whistleblower Systems

July 2003 Wilmer Cutler & Pickering and PriceWaterhouseCoopers recently released a survey that analyzes economic crimes caused by internal corporate fraud.  The results should be interesting to lawyers charged with implementing, investigating, or recovering fraud losses.  Important findings include: Internal frauds threaten most businesses.  Worldwide, 37 percent of the over 3600 companies surveyed reported significant [...]

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